Energy-Water Nexus: The Energy Sector’s Water Use

Water and energy are critical resources that are reciprocally linked; this interdependence is often described as the water-energy nexus. Meeting energy-sector water needs, which are often large, depends upon the local availability of water for fuel production, hydropower generation, and thermoelectric power plant cooling. The U.S. energy sector’s use of water is significant in terms of water withdrawals and water consumption. In 2005, thermoelectric cooling represented 41% of water withdrawn nationally, and 6% of water consumed nationally. The majority of the anticipated increase in water consumption by 2030 is attributed to domestic biofuel and oil and gas production. Policy makers at the federal, state, and local levels are faced with deciding whether to respond to the growing water needs of the energy sector, and if so, which policy levers to use (e.g., tax incentives, loan guarantees, permits, regulations, planning, or education). Many U.S. energy sector water decisions are made by private entities, and state entities have the majority of the authority over water use and allocation policies and decisions.

Conventional hydropower accounts for approximately 8% of total U.S. net electricity generation, and more than 80% of U.S. electricity is generated at thermoelectric facilities that depend on cooling water. Water availability issues, such as regional drought, low flow, or intense competition for water can curtail hydroelectric and thermoelectric generation. An assessment of the drought vulnerability of electricity in the western United States found broad resiliency, while also identifying the Pacific Northwest and the Texas grid at higher risk. Future withdrawals associated with electric generation may grow slightly, remain steady, or decline depending on a number of factors. These include reduced generation from facilities using once-through cooling because of compliance with proposed federal cooling water intake regulations or shifts in how electricity is generated (e.g., less from coal and more from wind and natural gas).

Energy choices represent complex tradeoffs; water use and wastewater byproducts are two of many factors to consider when making energy choices. For many policymakers, concerns other than water.—low-cost reliable energy, energy independence and security, climate change mitigation, public health, and job creation.—are more significant drivers of their positions on energy policies.